Fundamental analytics

American currency strengthens after the release of contradictory data

On Thursday, the main US stock indexes opened in the green, but immediately fell under pressure and headed into negative territory amid the release of conflicting data and the strengthening of the US currency. Looks like starting new Wall-Street session will be contradictory and mixed today.

The main economic index of today's statistical block - Philadelphia Index fell in March to 22.3 points (the previous value of 25.9), with prices lower, new orders higher, employment  also higher. The Empire Manufacturing index, on the contrary, showed growth to the value of 25 points, while the past value was around 22 points, and the index was down for four consecutive months.

At the same time, the number of Americans applying for new unemployment benefits fell over the past week, jobless claims data signals a healthy growth momentum in the labor market. Perhaps, this is the only significant positive data on the American economy for recent days.

With the start of American session USD dollar received long-awaited support. It should be noted that the activity of trading of FX market in the last four days remains at a minimum level - instruments are traded in narrow ranges, with the American currency being under relative pressure during last trading sessions. As a result, after the release of the data, USD dollar index strengthened from 89.20 to 89.50. At the Forex currency market, EUR / USD pair fell to the area of ​​$ 1.2325. On the contrary, against the Japanese yen, USD dollar continues to decline. Today, USD / JPY continued to move down amid a significant decline in the yield of US 10-year bonds, the pair is trading through the levels JPY105.95. Therefore, the general downward background of the pair for today is maintained and in the absence of important news, the price may continue to decline towards the lows of the year. It is characteristic that in the immediate vicinity of the current course there is a strategic level of support JPY105.30, the breakthrough of which will open the way to even more minimal levels, located near the JPY103 mark.

The British pound suspended the offensive, after GBP / USD fixed above the former resistance at 1.3910-1.3930, the offensive rush of bulls began to slow down. Somewhere, at current levels of the market, a downward resistance line is moving, from annual highs in the region of 1.4267, originating in January 2018.

In general, by the end of the week, global sentiment remains cautious: the main negative factor is the risks of global economic growth slowdown amid deteriorating conditions for world trade. Yesterday there was a new series of news confirming these fears - the US administration requires the PRC to reduce the trade surplus from the US by $ 100 billion. The US president said he was going to impose duties on a wide range of Chinese goods for up to $ 60 billion. However, judging by the dynamics defensive assets (gold, government bond yields) all these negative news have not yet led to the redistribution of assets into safe harbors.

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